Collector of Taxes of Lakeville v. Bay State Street Railway

• Decision Date: 06 January 1920
• Citation: 234 Mass. 336
• Parties: COLLECTOR OF TAXES OF LAKEVILLE v. BAY STATE STREET RAILWAY, Wallace B. Donham, receiver.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

234 Mass. 336

COLLECTOR OF TAXES OF LAKEVILLE v. BAY STATE STREET RAILWAY, Wallace B. Donham, receiver.

Supreme Judicial Court of Massachusetts, Suffolk.

January 6, 1920

December 4, 1919.

Present: RUGG, C.

J., BRALEY, DE COURCY, CROSBY, & PIERCE, JJ.

Tax, Commutation tax. Street Railway. Receiver. Practice, Civil, Parties. The commutation tax provided by St. 1909, c. 490, Part III Sections 47,

48, 50, is neither a property tax nor an excise tax upon the franchise of the carrier as a corporation and its right to exist and to do business; but it is an excise tax upon the operation of street railway and electric railroad companies in public ways. Upon the appointment by the District Court of the United States for the District of

Massachusetts of a receiver of the property of the Bay State Street Railway Company, the title of the property of the corporation was not diverted from the corporation and transferred to the receiver: he became its custodian but not its owner.

By the appointment of the receiver above described, the corporation was not dissolved either in form or in substance.

The continued operation, by the receiver above described, of the street railway as a common carrier was in the exercise of the rights and franchises of the street railway corporation. A tax was assessed upon a street railway company under St. 1909, c 490,

Part III, Section 47, 48, 50, for a year beginning on October 1. In December of that year a receiver of the property of the corporation was appointed under a decree by the authority of which he continued the operation of the street railway as a common carrier and which authorized him "to pay all taxes due or to become due from the said" street railway company "or any part thereof." Held, that the appointment of the receiver did not operate to make the corporation not liable for the tax for that part of the year following such appointment, and that the receiver should pay the tax when assessed.

The requirements of St. 1909, c. 490, Part III, Sections 47, 48, 50, as to the filing of a return under oath by the president and treasurer of a street railway company, containing information which forms the basis of the tax to be assessed, makes it the duty of the receiver, appointed as above described, to furnish to such officers the information necessary for the making of such returns.

An action to collect the tax above described was brought against both the corporation and the receiver by leave of the court which appointed the receiver. No question was raised by the defendant as to the form of the action. In holding that under the decree appointing him, the receiver should pay the tax, it was said, that judgment in the action should run against the corporation.

CONTRACT by the collector of taxes of the town of Lakeville against the Bay State Street Railway Company and Wallace B. Donham, receiver of that corporation under a decree of the District Court of the United States for the District of Massachusetts, seeking to recover the balance of a commutation excise tax assessed under St. 1909, c. 490, Part III, Sections 47, 48, 50. Writ dated September 30, 1919.

The defendants in their answer admitted all the material allegations of fact in the declaration.

In the Superior Court, Hitchcock, J., without a decision, reported the case, upon the pleadings and the facts thus agreed to, to this court for determination.

St. 1909, c.

490, Part III, Sections 47, 48, 50, are as follows:

"Section 47. A street railway or an electric railroad company, including a company whose lines are located partly within and partly without the limits of the Commonwealth, whether chartered or organized under the laws of this Commonwealth or elsewhere, shall annually, on or before the fifteenth day of October, make and file in the office of the board of assessors of every city and town in which any part of the railway or railroad operated by it is situated a return signed and sworn to by its president and treasurer, stating, in the case of a street railway company, the length of track operated by it in public ways and places in such city or town, and also the total length of track operated by it in public ways and places, and in the case of an electric railroad company stating the length of track operated by it longitudinally upon public ways and places in such city or town, and also the total length of track operated by it, determined as provided in section forty, and also the amount of its gross receipts during the year ending on the preceding thirtieth day of September, including therein all amounts received by it from the operation of its railway or railroad, but excluding income derived from the sale of power, rental of tracks or other sources.

"Section 48. On or before the first day of November annually, the assessors of every city and town in which a street railway or an electric railroad is operated, including a company whose lines are located partly within and partly without the limits of the Commonwealth, whether chartered or organized under the laws of this Commonwealth or elsewhere, shall assess on each company described in the preceding section operating a railway or railroad therein an excise tax of an amount equal to such proportion of the following percentages of the gross receipts of such company as, in the case of a street railway company, the length of tracks operated by it in public ways and places of such city or town bears to the total length of tracks operated by it in public ways and places, and in the case of an electric railroad company as the length of tracks operated by it longitudinally in public ways and places of such city or town bears to the total length of tracks operated by it.

"The percentages shall be based upon the annual gross receipts for each mile of track as follows, and computed upon the aggregate of said annual gross receipts: four thousand dollars or less, one per cent; more than four thousand dollars and less than seven thousand, two per cent; more than seven thousand dollars and less than fourteen thousand, two and one quarter per cent; more than fourteen thousand dollars and less than twenty-one thousand, two and one balf per cent; more than twenty-one thousand dollars and less than twenty-eight thousand, two and three quarters per cent; twenty-eight thousand dollars or more, three per cent.

"The excise tax provided by this section shall be in addition to the taxes otherwise provided by law."

"Section 50. Prior to the fifteenth day of November in each year the assessors of every city and town shall notify the collector of taxes thereof of the amount of excise tax assessed therein under the provisions of section forty-eight, and the collector shall forthwith notify the treasurer of each street railway and electric railroad company of the amount of excise tax so assessed upon it, which shall become due and payable within thirty days after the receipt of such notice. The provisions of Part II, so far as appropriate, shall apply to the collection of such excise tax."

W. G. Rowe, for the plaintiff.

S. H. Pillsbury, (A.

P. Lowell with him,) for the defendants.

RUGG, C. J. This is an action at law by the collector of taxes of the town of Lakeville to recover the balance of the commutation excise tax assessed under the general tax act St. 1909, c. 490, Part III, Sections 47, 48, 50. The tax was assessed upon the Bay State Street Railway Company for the period between October 1, 1917, and September 30, 1918, and was a single tax assessed as a unit. The street railway company operated its railway through its own officers until December 12, 1917 when the District Court of the United States for the District of Massachusetts appointed as its receiver the defendant Wallace B. Donham, who immediately took possession of its property and franchises and operated the same for the remainder of the period. This action is brought by permission of the district court of the United States.

The question is, whether under these circumstances the tax was lawfully assessed for one sum for the entire period without regard to the intervention of the fact of receivership.

The commutation excise tax upon street railways was established by the Legislature as a uniform rule for money payments to take the place of and to be in substitution for the heterogeneous requirements of the general law in connection with the varying conditions contained in grants of locations made by the several boards of aldermen and selectmen as to repairs of parts of streets in which street railway tracks were laid. The history is set forth in Springfield v. Springfield Street Railway, 182 Mass. 41 , and Worcester v Worcester Consolidated Street Railway, 182 Mass. 49 . The purpose of the legislation, which was first embodied in St. 1898, c. 578, was to impose upon the cities and towns responsibility for the care of streets and highways and to relieve the street railways therefrom (with exceptions not here material), and to provide in substitution for...